The project is being developed by a joint venture company Vicat Sagar Cement Limited (“Vicat Sagar”), whose shareholding structure is as follows: 51% Vicat SA (“Vicat”) and 49% Sagar Cements (“Sagar”). Vicat, the majority owner is a multi-regional manufacturer and distributor of cement, aggregates, ready-mix concrete and related building materials and has a cement production capacity of 18.6 mtpa spread over 11 countries. Vicat is listed on the Paris Stock Exchange. Sagar, the other main shareholder, is an experienced Indian cement manufacturer based in Hyderabad with a production capacity of 2.6 mtpa. It is listed on the National and Bombay Stock Exchange.

Total Project cost is estimated to be $345 million IFC is considering an investment, in the form of a combination of debt and equity or quasi-equity, in the range of $75-90 million.

90.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity	15.0

* These investment figures are indicative

The Project is a greenfield site located nearby Chatrasala village, Gulbarga district in Karnataka, on the border of Andhra Pradesh some 130 kilometers west of the city of Hyderabad.

The project will have a strong development impact. First, it will increase the availability of competitively priced cement, a critical basic input needed for the local infrastructure and housing sectors. Second, it will create 590 direct and over 1500 indirect jobs around the region both during the construction and operational stages. Third, it will improve the road and railway infrastructure in the project area. Finally, it has been designed to incorporate best available technologies and practices in a number of areas thereby minimizing water and energy consumption per ton of cement produced.

1. Assist an international industry player to partner with a local company to enter a high growth cement market in an IDA country. 2. Provide long-term financing adapted to the capital intensity and cyclicality of the industry at a time when such financing is not readily available. 3. Contribute in the adoption of best industry practices in terms of energy efficiency and control of emissions. 4. Work with the project company to apply best practice environmental and social standards

This is a Category A project according IFC’s Procedure for Environmental and Social Review of Projects. Please refer to the Environmental and Social Review Summary (ESRS) and the associated Environmental and Social Action Plan.

Key issues associated with this project involve: land acquisition for the plant site; access to and supply of raw materials (limestone, water); construction and operation of access routes (road and rail); integrated environmental, health and safety (EHS) management of the construction and operation of multiple project components (e.g. cement production, power plant, quarries and associated facilities); management of the construction labor force; waste discharges and emissions – especially the significant carbon dioxide emissions generated by clinker production and captive thermal power generation; impacts of project construction and operations on surrounding communities.

Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project can be obtained are provided in the IFC Environmental & Social Review Summary and Environmental &Social Action Plan.